The UK’s largest estate agency group Countrywide announced a wide-scale lay-off of middle management this week, simultaneously stating they would be rolling out their online only offer to the rest of their well established brands.
DMZ looks at the tough situation Countrywide are facing at the moment and the implications for their agents and brokers.
The news seems especially bad-timed given it was delivered just days after Philip Hammond’s order to scrap tenant fees, which had pummeled Countrywide’s shares by an estimated 14%. City analyst Anthony Codling at Jefferies estimates that Countrywide enjoy the largest projected 2017 profits from letting fees at £10 million, more than any other agent in the UK.
The company released a statement on the back of redundancies rumours, “in Retail, we are reducing the number of territories, from nine regions to five territories.”
The statement went on to say, “where we can, we are reducing the layers between our front line and leadership teams. These changes will enable us to move faster as we roll out new propositions and ways of working to benefit both our customers and colleagues alike, as well as to move to a multi-channel model with fewer, bigger brands and branches around the UK.”
The doom and gloom continued for Countrywide as they also issued a profit warning to the market.
Chief Executive Alison Platt blamed the decline in trading in the capital on changes to stamp duty and the broader fallout from the Brexit vote, “taking this business forward is going to be about self-help. The market isn’t going to do us any favours.” The week from hell is estimated to have wiped more than £75 million off the value of the company.
In an attempt to console shareholders and the broader market the statement ended on new beginnings for the firm, “on the back of a successful pilot, we are now rolling out our online offer to the next wave of brands and branches as planned.”
Interestingly, the Chief Marketing Officer at Countrywide, Helen Normoyle, revealed their pivot to the online or ‘hybrid’ market came from a survey the company conducted, “last year we invested in research with several thousand customers and as a result…we successfully piloted a new hybrid model for selling your home”.
DMZ are guessing that the £25 million IPO of online agency Puplebricks as well as numerous high profile acquisitions may have also been a factor.
What’s next for the swathe of ex-Countrywiders?
It seems like they’re wasting no time getting back into the market. Spicerhaart have snapped up Kim Chiles, Countrywide’s former “retail” director and former Countrywide regional manager Gareth Overton has landed a senior role at independent firm Henry Adams.
DealMakerz sympathises with Countrywide in what is surely one of the worst weeks in their history, but we wonder what the long term effect of a pivot to the hybrid model will be on their business. By offering a £795 flat fee they are not the cheapest online agent right now, surely a key factor for those looking to sell online.
Differentiating themselves from other hybrid offerings and getting consumers up to speed with their new strategy will both be critical challenges for the firm. Their statement mentioned that agents are facing a “changing market”, as the largest estate agent in the UK Countrywide need to ensure they aren’t left behind.